Biotech’s latest IPO didn’t quite go to plan

Trevi Therapeutics went to Wall Street with the goal of raising $70 million to turn a reformulated opioid into a treatment for an itchy skin disease called prurigo nodularis. Wall Street was less than obliging.

First, the company priced its shares at a 30% discount to its expected range. Then, yesterday, that price fell another 20% in open trading. That’s all after Trevi up-sized its offering from 4.7 million shares to 5.5 million shares, meaning the company sold more stock for less money and then saw it get even cheaper.

That’s arguably a bad sign for the handful of biotech companies waiting in the wings to go public, but much of Trevi’s fate seems company-specific. For one, the company’s reformulated opioid already failed in a mid-stage trial. And, for two, reformulating opioids isn’t exactly a red-hot idea at the moment.